Generally group insurance serves as a good cost effective complement to our personal insurance. It may not always be the cheapest option depending on which insurer, what type, and your age. You can watch my webinar where I discussed more about Group Insurance Policies here https://www.youtube.com/watch?v=oZvGpePXvHE
Let's take the example of the biggest group insurance in SG - MINDEF/MHA GTL. Some of its limitations include: 1. Unable to make nominations, 2. Instament payouts for claims above $200k, 3. Coverage definitions (CI), 4. Group risk.
1.Unable to make nominations
Because you are not the owner of this policy (MINDEF/MHA owns it) you do not have control over the policy like you would over a personal term life policy that you bought direct from an insurer.
You cannot make nominations of beneficiaries for the group term life policy and payouts will be made to your estate (subsequently depending on whether you have a will written, or Intestate Succession Act)
I don't suppose many young men serving NS or just starting working have their wills written. I shan't elaborate on the challenges of admininstration process here but it's troublesome and much slower than a nominated insurance policy payout to say the least.
2 Instalment payouts for TPD claims above $200,000
From the product summary pg 5 under Important Notes https://singlife.com/content/dam/public/sg/docu...
If the sum payable in respect of a valid claim is above S$200,000, the Company will first pay a lump sum of S$200,000 and pay the balance in three (3) equal annual instalments.
3. Coverage definitions may change (CI)
As in the case of the recent update to Critical Illness definitions, group policies like this have updated their CI coverage as well. You may have been holding on to a CI policy with 2014 definitions, and that would remain unchanged if it was your personal policy. Whether this is a good or bad thing, it's up to the policyholder to decide.
4. Group Risk
In the unlikely event of war/terrorism attacks. When many people claim together, there's a clause (on pg 3 of product summary) that limits the maximum liability of the insurer to 0.75% of aggregate sum assured.
Just some numbers for illustration. Say the aggregate sum assured of this group policy is $10 billion (it's definitely much higher), assuming there are 10,000 members who bought $1m coverage. If those 2 events occur and all 10,000 members claimed together, insurer will only pay out $75 million to the 10,000 members.
Others
It may interest you that qualified dependants of NSMen and a whole list of people who are not NSMen are also eligible for this group term policy. There is an equivalent for public officers - Public Officers Group Insurance Scheme (POGIS) which is currently underwritten by Singlife Aviva as well. $500k at $21.50.
It is definitely cheap for those under 65, but you realise the huge spike in premiums after 65 should you decide to hold on to the policy.
It maybe worthwhile to consider your current life stage and financial situation and speak to an adviser to review your existing coverage to ensure sufficiency and suitability of coverage.
Generally group insurance serves as a good cost effective complement to our personal insurance. It may not always be the cheapest option depending on which insurer, what type, and your age. You can watch my webinar where I discussed more about Group Insurance Policies here https://www.youtube.com/watch?v=oZvGpePXvHE
Let's take the example of the biggest group insurance in SG - MINDEF/MHA GTL. Some of its limitations include: 1. Unable to make nominations, 2. Instament payouts for claims above $200k, 3. Coverage definitions (CI), 4. Group risk.
1.Unable to make nominations
Because you are not the owner of this policy (MINDEF/MHA owns it) you do not have control over the policy like you would over a personal term life policy that you bought direct from an insurer.
You cannot make nominations of beneficiaries for the group term life policy and payouts will be made to your estate (subsequently depending on whether you have a will written, or Intestate Succession Act)
I don't suppose many young men serving NS or just starting working have their wills written. I shan't elaborate on the challenges of admininstration process here but it's troublesome and much slower than a nominated insurance policy payout to say the least.
2 Instalment payouts for TPD claims above $200,000
From the product summary pg 5 under Important Notes https://singlife.com/content/dam/public/sg/docu...
If the sum payable in respect of a valid claim is above S$200,000, the Company will first pay a lump sum of S$200,000 and pay the balance in three (3) equal annual instalments.
3. Coverage definitions may change (CI)
As in the case of the recent update to Critical Illness definitions, group policies like this have updated their CI coverage as well. You may have been holding on to a CI policy with 2014 definitions, and that would remain unchanged if it was your personal policy. Whether this is a good or bad thing, it's up to the policyholder to decide.
4. Group Risk
In the unlikely event of war/terrorism attacks. When many people claim together, there's a clause (on pg 3 of product summary) that limits the maximum liability of the insurer to 0.75% of aggregate sum assured.
Just some numbers for illustration. Say the aggregate sum assured of this group policy is $10 billion (it's definitely much higher), assuming there are 10,000 members who bought $1m coverage. If those 2 events occur and all 10,000 members claimed together, insurer will only pay out $75 million to the 10,000 members.
Others
It may interest you that qualified dependants of NSMen and a whole list of people who are not NSMen are also eligible for this group term policy. There is an equivalent for public officers - Public Officers Group Insurance Scheme (POGIS) which is currently underwritten by Singlife Aviva as well. $500k at $21.50.
It is definitely cheap for those under 65, but you realise the huge spike in premiums after 65 should you decide to hold on to the policy.
It maybe worthwhile to consider your current life stage and financial situation and speak to an adviser to review your existing coverage to ensure sufficiency and suitability of coverage.